Crapo v. Univ. Cove Partners, Ltd.

298 So.3d 697

Ed CRAPO, as Property Appraiser, Appellant,

v.UNIVERSITY COVE PARTNERS, LTD. ; John Power, as Tax Collector; and Jim Zingale, as Executive Director of the Florida Department of Revenue, Appellees.

No. 1D19-2894

District Court of Appeal of Florida, First District.

June 24, 2020

John C. Dent, Jr. and Jennifer A. McClain of Dent & McClain, Chartered, Sarasota, for Appellant.

Jennifer R. Dixon, S. Brendan Lynch, and Brian C. Lawrence of Lowndes, Drosdick, Doster, Kantor & Reed, P.A., Orlando, for Appellee University Cove Partners, Ltd.

Robert Swain, Senior Assistant County Attorney, Gainesville, for Appellee John Power, as Tax Collector.

Ashley Moody, Attorney General, and Randi E. Dincher, Assistant Attorney General, Tallahassee, for Appellee Jim Zingale, as Executive Director of the Florida Department of Revenue.

Lewis, J.

Appellant, Ed Crapo, as Alachua County's Property Appraiser, appeals an order granting summary judgment in favor of Appellee, University Cove Partners, Ltd., arguing that the trial court erred in determining that Appellee was entitled to the affordable housing ad valorem tax discount provided for in section 196.1978, Florida Statutes, for the year 2018. For the reasons that follow, we agree with Appellant and, therefore, reverse the order and remand for further proceedings.

FACTUAL BACKGROUND

In December 2018, Appellee filed a Complaint against Appellant, among others, representing that it owned real property in Alachua County consisting of an affordable housing project known as Harbor Cove Apartments. Appellee contested the legality and validity of the 2018 ad valorem taxation discount denial on the property. Appellee asserted that the property was entitled to the "affordable housing property exemption" under section 196.1978, which provides in subsection (2)(a) that affordable multifamily housing projects that meet the requirements of the statute "shall receive a 50 percent discount from the amount of ad valorem tax otherwise owed beginning with the January 1 assessment after the 15th completed year of the term of the recorded agreement ...." Appellant denied the exemption because "[Appellee] did not complete 15 years of the term of the recorded agreement with the Florida Housing Finance Corporation ["FHFC"] as of January 1, 2018."^* Appellant determined that the Agreement began on May 20, 2003, and was recorded in the official records on June 4, 2003, and that, as a result, Appellee did not complete its 15th year until May 20, 2018.

Appellee appealed the denial of the "exemption" to the Alachua County Value Adjustment Board. A special magistrate agreed with Appellant that Appellee was not entitled to the tax discount, relying upon the language used in the Extended Low-Income Housing Agreement ("Agreement") at issue, which was between the FHFC and Appellee. Pursuant to the Agreement, Appellee made a knowing, voluntary, and intelligent election to waive "for fifteen additional years following the last day of the Compliance Period any prerogative it would have to collect rents on the Low-Income Units at rates determined by the rental market except as provided herein in accordance with the requirements pursuant to the Code in return for 2002 Tax Credits." The term "Compliance Period" was defined as "with respect to any building that is included in the Development, a period of fifteen (15) years beginning on the first day of the first taxable year of the Credit Period with respect thereto." The term "Credit Period" was defined to mean "with respect to any building that is included in the Development, the period of ten (10) years beginning with (x) the taxable year in which the building is placed in service, or (y) at the election of the Owner, the succeeding taxable year." The term "Extended Use Period" was defined in part as "with respect to any building that is included in the Development, the period that begins on the first day of the Compliance Period in which such building is part of the Development."

Sections 2 and 3 of the Agreement set forth how the property was to be used and operated as a low-income housing development during the Extended Use Period. Section 6 of the Agreement is entitled "Term of this Agreement" and provides in subsection (a), "This Agreement shall become effective upon the date the Corporation [FHFC] executes this Agreement, and shall remain in full force and effect until the expiration of the Extended Use Period or as otherwise provided in this Section 6...." Appellee's representative signed the Agreement on May 20, 2003. A representative of FHFC signed the Agreement on May 21, 2003.

Appellee subsequently filed a Motion for Summary Judgment, arguing that because every building in the project had been placed in service as low-income housing prior to 2003, the Extended Use Period began on January 1, 2003, which meant it was entitled to the tax discount as of January 1, 2018. In its Order Granting Plaintiff's Motion for Summary Judgment, the trial court set forth in part:

1. Plaintiff's application for the 50 percent discount (exemption) under Section 196.1978, Florida Statutes, was inappropriately denied by the Property Appraiser.

2. The term of the Extended Low-Income Housing Agreement dated May 20, 2003 (the "Agreement") by and between Plaintiff and the Florida Housing Finance Corporation (the "FHFC") began on the first day of the taxable year in which the complex at issue was placed in service.

3. Section 6(a) of the Agreement does not establish the Agreement's term. Rather, it demonstrates nothing more than the date upon which the FHFC signed the Agreement. Section 6(a) should not be read in isolation. In Florida, "[t]he intention of the parties must be determined from an examination of the whole contract and not from the separate phrases or paragraphs." ...

4. "Term" is not defined in the Agreement. Reviewing the Agreement in its entirety, the Court finds that because the Agreement restricts the use of the complex at issue for the entirety of what is referred to in the Agreement as the "Extended Use Period," such period governs the Agreement's term. As demonstrated by Plaintiff, the restrictions that the Agreement placed on Plaintiff's complex commenced on the first day of the first taxable year that the complex was placed in service, which is January 1, 2002, as demonstrated by the form 8609s submitted by Plaintiff.

5. Therefore, the fifteen (15) year term ended on December 31, 2017.

6. Accordingly, the Plaintiff has met the fifteen (15) year requirement set forth in [section] 196.1978, Fla. Stat. (2018) and is entitled to the exemption (discount) for ad valorem taxation set forth therein.

The trial court ordered that Appellee was entitled to a refund of the 2018 taxes paid to the extent that the amount previously paid exceeded the amount of taxes that would be owed on a corrected assessment with the fifty percent discount in place. The trial court denied Appellant's motion for rehearing. This appeal followed.

ANALYSIS

A trial court's order granting final summary judgment is reviewed de novo to determine whether there are genuine issues of material fact and whether the court properly applied the correct rule of law. Glaze v. Worley , 157 So. 3d 552, 553 (Fla. 1st DCA 2015). An issue of statutory interpretation is also reviewed de novo. Coastal Creek Condo. Ass'n, Inc. v. Fla. Trust Servs. LLC , 275 So. 3d 836, 838 (Fla. 1st DCA 2019). The polestar of statutory interpretation is legislative intent, which is to be determined by first looking at the actual language used in the statute. Id. If the language of the statute is clear and unambiguous, a court may not resort to the rules of statutory construction, and the statute must be given its plain and obvious meaning. Id. A trial court's interpretation of a contract is reviewed de novo as well. Philip Morris USA Inc. v. Freeman , 285 So. 3d 999, 1001 (Fla. 1st DCA 2019). As is the case with statutory interpretation, the cardinal rule of contractual construction is that when the language of a contract is clear and unambiguous, the contract must be interpreted and enforced in accordance with its plain meaning. CitiMortgage, Inc. v. Turner , 172 So. 3d 502, 504 (Fla. 1st DCA 2015).

Real property in Florida is annually assessed and subject to ad valorem taxation, unless an exemption applies. Crapo v. Acad. for Five Element Acupuncture, Inc. , 278 So. 3d 113, 116 (Fla. 1st DCA 2019) (en banc). Section 196.1978, Florida Statutes (2018), which provides for the tax discount at issue, is entitled "Affordable housing property exemption" and provides in section (2)(a):

[P]roperty in a multifamily project that meets the requirements of this paragraph is considered property used for a charitable purpose and shall receive a 50 percent discount from the amount of ad valorem tax otherwise owed beginning with the January 1 assessment after the 15th completed year of the term of the recorded agreement

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